Due to the late filing or filing over half of the way into the 2023 test year, the schedule that the Yukon Energy Corporation (YEC) outlined in its original application has become completely skewed. We are now three quarters of the way through the 2024 test year and still waiting for the final verdict. From the YEC cover letter this review compliance will not be finished until Dec. 31, 2026. In no way does this hold to the principle for preventing intergenerational inequities.
When will this be fixed?
It has been over a year since YEC applied for a rate increase through the 2023/24 General Rate Application (GRA). From the newly submitted compliance filing by YEC, the Yukon Utilities Consumers' Group (UCG) finds some important implications to our bills.
A rider is what is used for each rate hearing to put in place the new increases in our rates. The new increase is added onto the already in place adjustment rider each time there is a hearing, for each utility. This is on top of our prescribed customer charge and energy charge (how much electricity we use). Please look at your bill to see these various charges and riders by both ATCO Electric Yukon and YEC.
Before the 2023/24 GRA, residential ratepayers were paying a 34.84 per cent YEC revenue shortfall rider (Rider J) and a 3.12 per cent temporary true-up rider, as well as a fuel surcharge (Rider F) on top of our customer charge and energy charge. This compliance filing reveals a Rider J increase of 20.56 per cent (10.39 per cent in 2023 and 10.17 per cent in 2024) and then a 9.45 per cent temporary true-up Rider J13. And very soon we will likely experience a new diesel fuel cost Rider F.
The YEC has not provided any information on how this compliance will be reflected in updated residential bills, but it certainly appears that this will not be the 14.11 per cent rate increase from the original application. Ratepayers need to know how this compliance filing will impact their bills to make an informed decision on how to budget for future bill increases, especially with the winter season on our doorstep. Ratepayers should not just have to swallow a new increased bill without knowing how this GRA was determined. It is the YEC and the Yukon Utilities Board responsibility to make this clear to the public they represent.
Accordingly, UCG request this information be disclosed before the board makes final rate changes.
UCG was under the impression that the purpose of a rate application was to be certain the forecasting methods and revenue requirement of the application were prudent. The general purpose is to keep rate impacts on ratepayers at or below the rates requested in the original YEC application.
Case in point, UCG does not understand how the utilities make a filing for rate of return and then claim to wait and see what happens to the newest comparative to get a new return. If this is not retroactive ratemaking, then we certainly have the wrong definition. We request to see an explanation of how this is an acceptable principle by the regulator.
Accordingly, UCG submits that it is far past time that the board holds the utilities accountable to abide by the forecasts they so arrogantly pronounce as accurate in their application. The YEC promised ratepayers a forecasted revenue requirement and then received more from the board in a regulatory outcome. How is this possible in rate regulation?
Also, during the commencement of this process at a public information session, YEC promised that they would provide bill stability and limit the impact of rate changes on monthly electricity bills by applying these rates when other riders would end or be put on hold.
In this same public forum YEC then promised the bill impacts of 3.02 per cent for Oct. 1, 2021, then 3 per cent for Jan. 1, 2024, and finally 5.8 per cent in final true up Aug. 1, 2024. For a 1,000-kilowatt-hour bill, that accumulates to 11.82 per cent or $26.20 per month. Now we are finding from this compliance a total impact of 30.01 per cent.
Again, YEC and the YUB need to demonstrate how this compliance filing will impact us in a new billing. We request this information be openly given before the board makes a final compliance decision.
UCG questions from all these pretenses: How in any way is this compliance filing providing bill stability and limiting the impact of rate changes on monthly electricity bills? This was promised by the YEC to ratepayers at their public information session on Oct. 11, 2023, on page 2 of the slide presentation. How can the public have trust in the process when these promises appear far from being kept by the utilities and their regulator?
From all this our organization, the UCG, questions how in any way this compliance filing will provide bill stability and limit the impact on our bills. We look forward to the regulator, the Yukon Utilities Board, to put some guidance on this.
A 30 per cent rate increase by the YEC is greater than ever experienced in rate regulation of this corporation, except for the 50 per cent increase in 1993 when Cyprus Anvil mine in Faro closed and the YEC had to make up revenues from its' firm ratepayers to collect its profits. This is when the UCG was formed to expose immoral regulatory ratemaking.
Roger Rondeau
Representative
Yukon Utilities Consumers' Group
